Posted 2 years ago on Nov. 4, 2012, 6:25 a.m. EST by factsrfun
(6896)
from Phoenix, AZ
This content is user submitted and not an official statement

This is from the Congress’s own think tank some highlights.

“Although the statutory top marginal tax rate was over 90% in the 1950s, the average tax rate for the very rich was much lower. The average tax rates at five-year intervals since 1945 for the top 0.1% and top 0.01% of taxpayers is shown in Figure 1. The average tax rate for the top 0.01% (one taxpayer in 10,000) was about 60% in 1945 and fell to 24.2% by 1990. The average tax rate for the top 0.1% (one taxpayer in 1,000) was 55% in 1945 and also fell to 24.2% by 1990, following a similar downward path as the tax rate for the top 0.01%. Between 1990 and 1995, the average tax rate for both the top 0.1% and top 0.01% increased to about 31%. After 1995, the average tax rate for the top 0.01% was lower than that for the top 0.1%.”

“It is recognized that measure of U.S. income disparities have increased over the past 35 years. According to income tax data, average inflation-adjusted or real income increased by 116% (that is, about doubled) since 1945. Average real income increased by 395% for the top 0.1% and by 692% for the top 0.01% over this period. Average real income for the balance of the top 1% in the income distribution (i.e., all but the top 0.1%) increased by about 165%. The share of income going to the top 1% increased from 12.5% in 1945 to 19.8% in 2010. Three-quarters of this increase in income share went to the top 0.1%. Since the major changes in the distribution of income were largely due to changes in the top 0.1% of the income distribution, the focus of the analysis is on the top 0.1%.”

Concluding Remarks:
“The top income tax rates have changed considerably since the end of World War II. Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The average tax rate faced by the top 0.01% of taxpayers was above 40% until the mid-1980s; today it is below 25%. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the second World War.

The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.”

It's a bunch of PhDs that do research for congress people like the Heritage does for the GOP or Pew for the Dems. Roughly speaking nothing here surprises me, I've been watching this for a bit and saw jobs soar after Clinton raised taxes and fall like brick after Bush cut them.

Over the past couple of decades it has, I think it's because we have let taxes fall below the "sweet spot" like 98.6 is for body temp, there is a good spot, we can't take our body temp to zero nor can we taxes to zero, or even too close to it if we want the nation to live.

hard to say, we know that when we took them from 35 to 39% (top rate) we created 23 million jobs, when we cut them back to 35% we lost jobs,l so going to say 42% top rate would seem a good place to start, then if you create jobs the next year you might try 45% and see if you create more or less.

Rates typically have little to do with revenue. What was the change in Gov revenue from the top 0.1 % of earners over the periods noted above? Could it be that the top 0.1 % are clever enough (or just have clever accountants) to adapt to changing tax laws and minimize the tax that they actually pay?

Also, it does not always follow that an increase in the tax rate, or even an increase in revenue, for the top 0.1 % transfers wealth to the bottom 25%. Most Gov programs in fact take money from both the rich and the poor, waste most of it, and give what's left to the middle class.

I see little support for your positions in the report, however tax rates have nothing to do with creating jobs so raising rates is not a threat to the economy nor is cutting rates a boost, so in light of that might as well try to get the debt paid. Let's take the top rate back to 90 now and see if it works as good as when Clinton raised it to 39 we didn't owe as much back then.

Lets say a business is taxed at 20% but that business is selling its products world wide and business is good.

Is that 20% tax rate just as good for a business that is only selling local and is not doing so well?

Lets change things by saying that a business taxed at 20% selling worldwide is not doing so great is that 20% tax rate good for that business?

Or how about the small businesses that is taxed at 20% and is doing great is that tax rate good for that business?

The economy has a "hugh" effect on how well a business does along with the taxes it has to pay. More revenue = able to pay more in taxes

Less revenue + able to pay less in taxes.

Which portion of the business sector employes more people - it's the small businesses sector so if they are being strangled by paying higher taxes then they have no other choice to either cut costs - reduce employees hours or cut employees or go out of business.

You hit the nail on the head about small businesses being LLCs or Sole Proprietorships. Those businesses are the "blood line" for the economy and when they are "styfeled" regardless of what the cause is the economy will slow down.

Well if you study the Gov revenue generated from the top 0.1 % over the periods noted above you will find that there is little correlation between rate and revenue except in the limits. There is a strong correlation between revenue and income (I would go out on a limb and define it as causal). So if the goal is to generate revenue to pay down the debt (or other good use) then the best way to do that is to increase the income of the top 0.1%.

What do you suspect is the best way to do that?

BTW, notice that the report gives details about rates only, not revenue. That should make you suspicious. They do however note that economic growth is uncorrelated to tax rates, but fail to understand what that means for revenue. As Laffer points out rates and revenue are in fact correlated, but only in the limits.

Are you trying to increase Gov revenue from the 0.1%? Will your plan achieve that goal? As the report points out there is little correlation between tax rates and economic growth. A more effective strategy for increasing revenue is to increase economic growth (which also has other advantages).

Why not devise a strategy that increases the income of the top 0.1%? Even at current rates that will surely increase Gov revenue from the top 0.1%.

I agree with you that economic growth is the right answer, however it is really not so simple to increase growth as you have probably noticed recently.

Will your tax plan increase or decrease economic growth? If you raise taxes but fail to achieve growth there will be no additional money available to cut taxes on the working class.

Don't get me wrong, cutting taxes is generally a good idea because individuals are usually better at spending their money than the Gov, but don't forget that the Gov has other deleterious means for generating revenue like borrowing it, or worse, printing it.

If you raise taxes on the wealthy corps & individuals but their income drops there will be no increase in Gov revenue to finance the cuts in taxes/debt for the working class.

Growth is the key. It fixes a lot of ills.

BTW, the Gov has done a lot of investing lately ($ 2.5 trillion since 2009) and we have seen little growth . They are really not very good at investing (an investment in the S&P 500 over the same period grew by 75 %).

They have tried very little of what I proposed. The $750b stimulus investment was too little (cut by repubs) and my tax proposals have not been tried.

Still the small stimulus did create growth. Wek growth because repubs have obstructed all jobs measures. They filibustered a million vet jobs bill! And state repubs fired almost a million state workers during this employment crises.

That is why the recovery is weak. Traitorous repub obstruction and firing of workers.

Oh, plus Reagan spent an enormous trillion or so of then dollars on military and defense spending increases. Some economists say this increased government spend also helped economic growth. No. It wasn't the tax cuts. Reagan increased government spend, didn't pay for it. Instead, lowered tax rates. Debt tripled. Right wing fuckshitup-onomics.

One note, gas corps make about $0.07 per gallon in profit. The State on average takes about $ 0.49. Let's say you are successful with the above efforts and get the gas corps to cut their profit in half. You just saved $ 0.035 per gallon (less than 1 % savings). There are probably bigger fish to fry.

Oil prices were rising through the 70's until it peaked in 1980/81, when it began declining steadily and dramatically through the 80's and was relatively stable through the 90's. So yeah, that's what caused the growth in the 80's.

Construction spending in the 90s was < 3 % of GDP. The GDP went from $ 5 trillion to $ 10 trillion in the 90s. Even if construction doubled that is only an increase of $ 0.15 Trillion compared to $ 5 trillion in GDP growth.

It must be something else.

Oil prices in the 80s were about the same as they were over the last four years of very anemic growth . GDP in the 80s grew from $ 2.5 trillion to $ 6 trillion.

I say go ahead and try to take money away from the rich. Give it your best shot, but they have a lot of resources that they will use to resist.

Between me and you however, I would rather beat them at their own game.

Make America an irresistible investment opportunity for people with capital. Keep or lower the personal income tax rate, eliminate corporate income taxes, and let the money pour in from the US and around the world.

All profits from this new investment would generate tremendous revenue for the Fed, State, and local Govs. Remember that thanks to the progressive tax more revenue is generated from a $ earned by the rich than a $ earned by other income groups.

The republicans are not slowing growth, Wall Street is. The right is obstructing progress, but inflation is the economic culprit. Economist all deny that we are experiencing hyperinflation but if you look at the production and post-production price indexes, you can see that prices have been climbing at an alarming rate for 3 years now. The Fed continues to hand our tax dollars to the banks behind the curtain with no increase in demand to circulate the new money, which causes inflation. This is debt and it's a mystery as to why the right isn't raising hell over this particular form of debt. The Fed is now printing 40 billion a month indefinitely, which is going to have serious consequences over the next 6 months to a year if demand doesn't catch up, and I don't mean slight improvements. Again, the right is mum on this type of debt, apparently Wall St handouts are an acceptable form of debt. The only political solution is to raise wages but Obama is clearly avoiding the issue so obstruction from the right has not come into play economically yet. The credit downgrades are not because they aren't passing budgets, the downgrades were and are retaliation for the new regulations passed by democrats, thus blame for that issue and it's impact rest with Wall St. Republicans are just making noise and are a good distraction but the enemy is on Wall Street.

That 2.5 trillion went to companies, not the people. If you want to stimulate growth, there MUST be demand. That means putting money in the pockets of the masses to be able to spend that money on products and services that companies produce. What happened in the 1930's is happening again.
Some history:

Marriner S. Eccles was the Fed chairman during the Depression. He understood after watching the great speculative bubbles of the 1920s pop into massive misery, that prosperity — to endure — needs to be shared. Looking back on those years, in his 1951 memoir Beckoning Frontiers, Eccles would do his best to explain the impact he set out to make. Mass production, he noted at the outset, demands mass consumption, but people can’t afford to consume if the wealth an economy generates is concentrating at the top.

In the years leading up to the Great Depression, that concentrating was accelerating. A “giant suction pump,” charged Eccles, “had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth.”

“In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands,” Eccles observed, “the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

Sound familiar?

Then as now, inequality was hollowing out the nation. Eccles put the matter bluntly: “Had there been a better distribution of the current income from the national product — in other words, had there been less savings by business and the higher-income groups and more income in the lower groups — we should have had far greater stability in our economy.”

Nice spin. So you support anarchy? Without revenue, there will be no government, courts or laws. Not a great environment for " tremendous growth". We've been doing the "tax cut" thing for a long time and hasn't produced jobs or growth. Most people understand that the problem lies with inequality .............. not more tax cuts.

Was Thomas Jefferson and anarchist? If not then let's go with his definition:

"A wise and frugal Government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circlue of our felicities. "

BTW how do you propose to make people equal? Make short people tall? The blonde brunettes? The weak strong? The tone deaf concert violinists? I personally would like Beyonce's butt.

How much more tax cuts would you give GE? Just under 1/2 their PROFIT was from the treasury! Don't you think that -45.3% (yes minus) tax rate should be considered corporate welfare? I consider it theft due to the unholy alliance between government and corporations. If mittens tax rate of 14% is horrible (which it is), what the hell is -45%. There are 29 more examples in the article below:

08-'10 Profit: $10,460,000,000

'08-'10 Tax: $-4,737,000,000

** '08-'10 Rate: -45.3% *

REVEALED: The 30 American Companies That Paid Less Than $0 In Income Tax Over The Last 3 Years

I would not tax GE at all. Corporate income tax is a regressive tax that disproportionately hurts the poor because it increases the cost of goods like food and clothing that are normally exempt from sales and VAT taxes.

So would you pad their earnings by 45% with taxpayer dollars too? Do you think they deserve that? Do you think the American people deserve to have their tax money funneled to corporations? That's what's happening. It's nothing more than corporate welfare and thievery.

They want the rights of an individual, and the tax loopholes of corporations.

If they make their money here, they can pay their taxes here too.

There is a sufficiency in the world for man's need but not for man's greed.
Mahatma Gandhi

The individual owners of GE do pay taxes on the money that they make, but only after the Gov first taxes the corporate profit. These taxes are borne by the consumers of GE products. So corporate taxes are just hidden taxes on the consumer.

If GE makes and sells bread or clothing the poorest among us are hurt the worst by this Gov practice.

Of course not. GE must survive on its own and compete in the market place like other businesses. This is best for the consumer, drives innovation, keeps prices down, improves quality and productivity, and grows the economy.

Why do you think that Jeff Immelt likes to have diner with President Obama? Because he enjoys his company? No, he wants Obama to create advantages for his company in the marketplace.

Why does Jeff Immelt have diner with President Obama? Because of the unholy alliance between corporations and government. It appears to have helped his company's bottom line by about 45.3% on the backs of American taxpayers.

See, we agree again. Businesses should not be given unfair advantages in the market by Gov (in the limit this should be a philosophy-without-borders). This practice invites corruption, is bad for the consumer, and stifles economic growth.

Now, we agree about corporations, but what other institutions behave like this with the Gov, creating unfair advantages for particular groups and hurt the consumer?

It is true that if tax rates have an affect then higher taxes results in more jobs based on our experience over the past 20 years, taken over a longer period as the study does and going back 65 years there does not seem to be any relationship to job creation and tax rates, however rates were much higher then it could be that taxes are so low right now that they are discouraging job creation as there is little reason for investors to risk their money when government bonds are so plentiful.

In order to PROVE that raising taxes-and that act alone-created JOBS in the past, you have to investigate and be sure that no other outside events or acts were involved or responsible for those jobs being created.

SPECULATING that the JOBS you speak of were a direct result of raising taxes and NOTHING else is folly, and I do not agree with folly.

PROVING to me that the JOBS you speak of were a direct result of raising taxes and NOTHING else is YOUR job-because you are the one making the claim you are asking all other reasonable, non-foolish people to accept as truth.

seems you have a good point about cutting taxes, we can PROVE it causes debt, but there's NO proof you get any jobs, so there is no argument for cutting taxes or even keeping them low as far as jobs go, now if you're talking about the wealth of the wealthy well that might be affected, but not jobs we can raise taxes with NO impact there as far as any proof goes

I am not a fan of raising taxes on anyone. The Gov has demonstrated for years that it is a poor steward of our money. They are inefficient, corrupt, and inept a pretty much everything except infringing on the rights of citizens. We should be cutting off their money supply not increasing it.